Republican Tax bill.....Alimony

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Republican Tax bill.....Alimony

Unread postby WCD7399 » Thu Nov 02, 2017 11:22 am

Section 1309 - Repeal of Alimony Tax Deduction!!
Would become taxable income and would not count as income for those receiving it!
BS!
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Re: Republican Tax bill.....Alimony

Unread postby Fatheroffour » Thu Nov 02, 2017 12:22 pm

Looks like they're terminating the deduction for contributing to medical savings accounts too.
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Re: Republican Tax bill.....Alimony

Unread postby RC611V » Thu Nov 02, 2017 12:27 pm

Makin' this place great again
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Re: Republican Tax bill.....Alimony

Unread postby a dad » Thu Nov 02, 2017 3:11 pm

And they tried to get the max contribution to pre-tax IRA's including 401K's, lowered to $2,400 yearly, down from the current $18,000.

Thus lowering potential savings while raising taxes paid on income.
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Re: Republican Tax bill.....Alimony

Unread postby TJinCA » Thu Nov 02, 2017 4:29 pm

WCD7399 wrote:Section 1309 - Repeal of Alimony Tax Deduction!!
Would become taxable income and would not count as income for those receiving it!
BS!


Note that this repeal, if passed, only applies to divorce orders executed after December 31, 2017. So I think if you have a support order in place currently you can still deduct and your ex still has to pay the tax. Also says that if you have a current order modified after December 31 the modified order keeps the same tax treatment you have now unless it specifies that the Act applies to it. [Disclaimer - I'm not a lawyer or a tax expert. Do not rely on me for tax advice!]

I suppose there's actually some revenue generated by this repeal, since alimony payers would generally be paying tax at a higher rate than receivers.

Also keep in mind that under this bill the standard deduction will also be going up to $12,200 for singles and $18,300 if you have a qualifying child, so depending on the amount of spousal support being paid your deduction could in fact go up rather than down, and between that and rates going down you could very well wind up with a lower overall tax bill.

Unfortunately for me I'm in the process of negotiating a support agreement right now and it's questionable whether it will be executed before December 31, so this just adds a complication that I really don't need.
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Re: Republican Tax bill.....Alimony

Unread postby TJinCA » Thu Nov 02, 2017 8:14 pm

Fatheroffour wrote:Looks like they're terminating the deduction for contributing to medical savings accounts too.


They're proposing getting rid of deductions for Archer Medical Savings Accounts, which I believe are a pretty limited population, and for medical expenses, which you can only deduct if you itemize and they exceed 10% of income (anybody ever actually managed that?). So I suspect eliminating those deductions impacts a small number of people and again is offset by increasing the standard deduction and adjusting the brackets.

I believe the various Republican health care proposals have aimed at increasing the availability of pre-tax Health Savings Accounts, and as best I can read the draft tax bill (it's kind of confusing) they seem to be encouraging employer contributions to HSAs.

I think the bottom line is if you don't itemize, or if your itemized deductions (not including spousal support under existing orders) total less than $12,200 (if single), you probably come out ahead on your individual tax bill under this proposal.
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Re: Republican Tax bill.....Alimony

Unread postby Outis » Thu Nov 02, 2017 8:17 pm

Fortunately, the nonpartisan CBO will provide a more detailed analysis upon which opinions can be based.
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Re: Republican Tax bill.....Alimony

Unread postby Trevor » Thu Nov 02, 2017 8:50 pm

Seriously - I am astonished that they can get anyone to vote for them, with < feces > like this in their plans.
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Re: Republican Tax bill.....Alimony

Unread postby WCD7399 » Fri Nov 03, 2017 9:54 am

I honest to god wasnt trying to start a political debate about the entire tax bill... Wanted to keep it related to this fourm.
I did not see that it only effects agreements after dec 2017. That is good. but the men here should be very aware of that!
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Re: Republican Tax bill.....Alimony

Unread postby a dad » Fri Nov 03, 2017 11:00 am

For us divorced dad's, it's more than just taxing us to pay our ex's, it also takes away the $4,050 per child deduction.
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